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The Effects of Corporate Investment and Public Grants on Climate and Energy Start-up Outcomes

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To meet global climate goals, diverse funding sources for climate-tech start-ups is key.

New research finds that corporate investments into climate-tech start-ups coupled with other funding can expedite the deployment of new technology.

Meet the Experts!

Kathleen Kennedy, Assistant Research Professor

Maria Borrero, Post-Masters Research Associate

Nathan Hultman, Director

Kavita Surana, Senior Fellow

Press release: More from the experts!

Check out the policy brief!

Kennedy, K.M., Edwards, M.R., Doblinger, C. et al. The effects of corporate investment and public grants on climate and energy startup outcomes. Nat Energy (2024). 

  • Public grants may not directly lead to significant outcomes for start-ups, but they often kickstart progress, especially for those working on challenging projects, and attract investment from corporations or other private sources.
  • Corporate investors tend to bring positive results for start-ups that have received grants or have many patents. Therefore, incentivizing these investors for more funding is needed for start-ups. 
  • Both corporate and other private investments can lead to higher failure rates for start-ups. Policymakers should take action to prevent harmful practices like corporations taking advantage of start-ups' ideas.


Climate and energy (climate-tech) startups can accelerate the commercialization of innovative technologies but face low investment and high failure rates. Here we analyse the effects of recent growth in corporate investments, combined with public grants and other private investments, on startup outcomes. We apply the Cox Proportional Hazards model to a dataset of 2,910 US climate-tech startups founded 2005–2020. We find that corporate and other private investments are significantly associated with both exits (initial public offerings, mergers/acquisitions) and failures (bankruptcy, going out of business). While public grants are not significantly associated with these outcomes, they fill important funding gaps in high-risk sectors. Publicly funded startups also exit at a higher rate with the addition of corporate investment (155% increase) compared with other private investment (78% increase). These findings highlight the roles of different investors in scaling startup technologies to meet climate goals and are robust across sectors, timelines and types of public funding (national, subnational).

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